Samsung 2Q26 Preview: Micron’s Surprise Has Been Erased, Core OP Is the Real Test

Mon, 29 Jun 2026 14:35:00 +0900

Related context This is a follow-up to Micron FY3Q26 earnings, the NVIDIA elasticity framework for Samsung and SK Hynix, Samsung-Hynix-Micron parity, Samsung shareholder return and DS bonus buyback flow, and Samsung versus SK Hynix in HBM4E 12-high.

TL;DR

The number that matters in Samsung Electronics’ 2Q26 preview is not simply reported operating profit. The market needs to separate reported OP from Core OP, defined as reported OP plus the catch-up accrual for performance-based compensation.

At current prices, Micron’s FY3Q26 surprise has almost disappeared from Korean memory equities. Micron retained an 8.0% gain versus its pre-earnings price as of June 26. Samsung Electronics is down 5.9% versus the June 24 close based on June 29 intraday data, while SK Hynix is down 0.5%. The June 25 reaction was real, but most of it was erased by June 26 and June 29.

Samsung’s 2Q26 DRAM pricing is not the downgrade factor. Conventional DRAM contract prices are estimated to be up 58-63% QoQ, while mobile LPDDR is up 70-83% QoQ. A blended Samsung DRAM ASP assumption in the high-50% QoQ range is therefore not aggressive.

The reasonable range for 2Q26 reported OP is KRW 87-92 trillion, with a midpoint of KRW 89.5 trillion. Adding back KRW 15-17 trillion of catch-up bonus accrual implies Core OP of roughly KRW 104-106 trillion. In other words, the correct reading is not “earnings fell from the KRW 100 trillion expectation to KRW 89 trillion.” It is closer to “the memory core business reached more than KRW 100 trillion of profit power, but Samsung is recognizing excess-profit sharing costs in 2Q.”

The rating is Watchlist / Conditional Buy. Conditions are clear: reported OP should be at least KRW 87 trillion, Core OP should be at least KRW 102 trillion, the downgrade should be explained by accruals rather than DRAM/NAND price or shipment weakness, and 3Q26 OP durability around KRW 100 trillion should remain credible.

Main Point

Micron’s surprise was reflected in Samsung and SK Hynix for one day on June 25, but it has mostly been erased. Samsung is back to a price that barely embeds the Micron read-through. The real test is not headline 2Q OP, but Core OP above KRW 100 trillion and the durability of 3Q memory earnings.

1. Price reaction: is Micron’s surprise still in Korea memory?

Micron reported FY3Q26 results after the U.S. close on June 24, 2026. For Korea, the clean baseline is the June 24 close.

Stock	Jun 24 close	Jun 25 close	Jun 26 close	Jun 29 intraday	Current vs Jun 24
Samsung Electronics	KRW 340,500	KRW 358,500	KRW 339,500	KRW 320,500	-5.9%
SK Hynix	KRW 2,580,000	KRW 2,917,000	KRW 2,673,000	KRW 2,568,000	-0.5%
Micron	USD 1,048.51	USD 1,213.56	USD 1,132.33	latest DB value Jun 26	+8.0%

Source: KII local daily price database for Korea and U.S. stocks; June 29 intraday Korea prices from Naver Finance API at 13:19 KST.

SK Hynix reacted most directly on June 25, rising 13.1%. But it has since nearly returned to its pre-event level. Samsung reacted 5.3% on June 25, then fell below the pre-event price. Micron still held an 8.0% gain as of June 26.

The conclusion is simple: at current prices, Korean memory has not retained Micron’s earnings read-through. It was reflected for one day, then erased by macro pressure, KOSPI overheat adjustment and company-specific uncertainty. The unreflected alpha is more visible in Samsung. SK Hynix is more of a pullback-and-reacceleration candidate.

2. What Micron confirmed

Micron FY3Q26 was a strong benchmark for the memory cycle. Revenue was USD 41.456 billion, non-GAAP EPS was USD 25.11, non-GAAP gross margin was 84.9%, and FY4Q26 guidance called for USD 50.0 billion revenue and USD 31.00 non-GAAP EPS. These are official company numbers. Micron FY3Q26 earnings release

The key read-throughs are:

Micron signal	Meaning for Samsung and SK Hynix
USD 41.456B revenue and 84.9% non-GAAP GM	Memory pricing, mix and shortage-driven operating leverage are very strong.
FY4Q guidance of USD 50B revenue and USD 31 EPS	Pricing and shipments are unlikely to collapse immediately after 2Q.
Data center revenue above USD 25B	AI memory demand is broader than HBM alone.
HBM4 and HBM4E roadmap	2027 allocation and customer qualification remain the next battleground.
Strategic Customer Agreements	Long-term contracts may reduce the old memory cyclicality discount.

This matters because Samsung now has to prove the same point with its own numbers: whether core memory profitability is already in the KRW 100 trillion range.

3. Reported OP versus Core OP

The working formula is:

Reported OP = accounting operating profit
Core OP = Reported OP + catch-up accrual for performance-based compensation

Base case:

Item	Base case
Reported OP	KRW 89.5T
Catch-up bonus accrual	KRW 15-17T
Core OP	KRW 104-106T

The important point is that the expected OP cut is not driven by weaker DRAM or NAND assumptions. In the research input, Kiwoom’s 2Q26 OP estimate fell from KRW 100T in May to KRW 89T on June 29. But over the same period, DRAM ASP assumptions moved from +55% QoQ to +58% QoQ, and NAND from +72% QoQ to +75% QoQ. The downgrade is therefore better explained by bonus accruals, non-memory weakness, DX cost pressure, and continued Foundry/S.LSI losses.

Item	May estimate	Late-June estimate	Meaning
2Q26 OP	KRW 100T	KRW 89T	Headline lower
DRAM ASP	+55% QoQ	+58% QoQ	Price assumption stronger
NAND ASP	+72% QoQ	+75% QoQ	Price assumption stronger
Downgrade driver	not applicable	Bonus, non-memory, DX, Foundry/S.LSI	Not a memory pricing problem

4. Official 1Q26 base

Samsung’s 1Q26 official results provide the base:

Item	1Q26
Company revenue	KRW 133.9T
Company operating profit	KRW 57.2T
DS revenue	KRW 81.7T
DS operating profit	KRW 53.7T

Source: Samsung Electronics 1Q26 results.

DS operating profit of KRW 53.7T is the key base for the 2Q bonus accrual discussion. If 1Q did not fully accrue the new profit-sharing structure, 2Q can carry a catch-up cost.

5. DRAM pricing is supportive

Product group	Estimated 2Q26 price trend	Interpretation
Conventional DRAM	+58-63% QoQ	Kiwoom’s +58% assumption is near the lower end of the market range.
PC DDR5	+43-48% QoQ	PC demand is not strong, but pricing still rose.
PC DDR4	+35-40% QoQ	Lower than DDR5, but still strong.
Mobile LPDDR4X	+70-75% QoQ	Mobile DRAM helps pull blended ASP higher.
Mobile LPDDR5X	+78-83% QoQ	Positive for Samsung’s blended DRAM ASP.
Consumer DRAM	+45-50% QoQ	Customer price resistance exists, but pricing is still up.

The core conclusion is that a high-50% QoQ blended DRAM ASP assumption is reasonable. If reported OP comes in near KRW 89T, it should not be interpreted as DRAM price weakness unless Samsung’s own disclosures say otherwise.

6. Bonus accrual treatment

The existence of DS performance-based compensation is not new. The unsettled question is scale, timing and disclosure quality.

Analytical purpose	How to treat bonus accrual
2Q earnings quality	Add it back to estimate Core OP
3Q run-rate	Exclude 1Q catch-up, include normal ongoing bonus expense
FY26 EPS	Include it
FY27 valuation	Include it if recurring
Shareholder return and FCF	Include it
Short-term event trade	Watch both reported OP and Core OP

The two mistakes to avoid are: treating all bonus expense as a one-off, or treating all of it as structural deterioration. The catch-up portion matters for 2Q interpretation. The recurring profit-sharing structure matters for FY26/FY27 EPS and valuation.

7. Sell-side OP distribution

Source	2Q26 OP estimate	Interpretation
BNK	KRW 77.7T	Most conservative bonus retroactive accrual assumption
Samsung Securities	KRW 81.3T	DRAM ASP +46%, NAND ASP +65%, DS bonus reflected
Mirae Asset	KRW 84.1T	Strong pre-accrual cost scenario near KRW 35T
FnGuide consensus	KRW 86.2T	Early-June average, may not fully reflect latest prices and accruals
Kiwoom Jun 29	KRW 89.0T	Higher DRAM/NAND price assumptions, but bonus/non-memory costs reflected
KB	KRW 90.0-90.2T	Memory price up more than 50%, DS OP in the high-KRW 80T range
Daishin	KRW 91.0T	Memory price strength with partial cost reflection
Hana	KRW 92.0T	Stronger pricing and shipment assumptions

Investment framing:

Reported OP range	Interpretation
Below KRW 84T	Bear case. Costs and non-memory drag are very large.
KRW 87-92T	Base cluster. This is the realistic range.
Above KRW 94T	Bull case. Costs are limited or price/shipments are even stronger.

8. Scenario model

Item	Bear	Base	Bull
DRAM blended ASP	+50%	+56-58%	+62-63%
DRAM bit growth	+4%	+5%	+6%
FX effect	+1.0%	+1.5%	+2.0%
DRAM revenue	KRW 86-88T	KRW 91-93T	KRW 95-97T
DRAM OP margin	71-73%	73-75%	76-78%
DRAM OP	KRW 62-64T	KRW 67-70T	KRW 72-75T
NAND OP	KRW 18-20T	KRW 20-22T	KRW 22-24T
Foundry/S.LSI OP	-KRW 1.5T to -KRW 1.0T	-KRW 1.0T to 0	0 to KRW 0.5T
Display/DX/Harman combined	-KRW 0.5T to KRW 1.0T	0 to KRW 1.0T	KRW 1-2T
Reported OP	KRW 82-86T	KRW 87-92T	KRW 94-98T

Base midpoint:

Item	Midpoint
Revenue	about KRW 181T
Reported OP	about KRW 89.5T
OPM	about 49.4%
Core OP	KRW 104-106T

9. Sensitivities

Variable	OP sensitivity
DRAM ASP +1ppt	+KRW 0.4-0.5T
DRAM bit growth +1ppt	+KRW 0.4-0.5T
NAND ASP +1ppt	+KRW 0.1-0.2T
Bonus/accrual +KRW 1T	-KRW 1.0T
DX cost +KRW 1T	-KRW 1.0T
Foundry/S.LSI loss +KRW 1T	-KRW 1.0T

The OP downgrade from KRW 100T to KRW 89T despite stronger DRAM/NAND price assumptions implies roughly KRW 12-13T of cost, accrual and non-memory drag.

10. Reported OP and Core OP matrix

Reported OP	Bonus accrual	Core OP	Interpretation	Action
KRW 92T or higher	about KRW 15T	KRW 107T or higher	Clear beat	Buy possible
KRW 89-92T	about KRW 15T	KRW 104-107T	In-line positive	Buy weakness
KRW 87-89T	about KRW 15T	KRW 102-104T	Consensus area	Staged entry possible
KRW 84-87T	about KRW 15T	KRW 99-102T	Weak miss	Needs explanation
KRW 84-87T	KRW 25-35T	KRW 109-122T	Headline miss, but neutral to positive if full-year pre-accrual	Verify cost nature
KRW 80-84T	about KRW 15T	KRW 95-99T	Cannot be explained by bonus alone	Wait or reduce
Below KRW 80T	any	not meaningful	Thesis damage likely	Avoid

11. Catalysts

Event	Timing	Importance	Watch item
Samsung 2Q26 preliminary results	likely early July 2026	Very high	Reported OP at least KRW 87T
Samsung 2Q26 final results and call	likely late July 2026	Very high	Bonus accrual, DS core profit, 3Q outlook
3Q26 DRAM/NAND contract prices	July-August 2026	Very high	Flat to up QoQ
HBM4E, SOCAMM2, eSSD customer comments	2H26	High	Evidence of share gain
Bonus-share buyback disclosure	TBD	Medium-high	Distinguish compensation buyback from cancellation buyback
Micron FY4Q26 results	likely late September 2026	High	Whether USD 50B revenue and USD 31 EPS are delivered

12. Valuation

The Kiwoom June 29 estimates summarized in the research input are:

Item	2026F	2027F
Revenue	KRW 723.6T	KRW 820.1T
Operating profit	KRW 372.9T	KRW 421.3T
EPS	KRW 43,429	KRW 48,177
PER	7.8x	7.0x
PBR	3.5x	2.3x
ROE	53.9%	39.6%

A KRW 430,000 target price implies 9.9x 2026F EPS and 8.9x 2027F EPS. This is valid only if 3Q26 OP remains above KRW 100T, 2027 EPS stays near KRW 48,000, bonus and stock compensation are already embedded in EPS, HBM4/eSSD contributions are visible, and DRAM/NAND prices do not fall sharply.

13. Red Team and invalidation

Risk	What would invalidate the thesis
Macro failure	Rates and credit spreads slow AI capex, hyperscaler capex guidance falls, AI server orders are delayed.
Micro failure	Samsung does not gain HBM4/eSSD share, HBM4 qualification is delayed, Foundry/S.LSI losses do not shrink.
Accounting failure	Reported OP falls below KRW 84T without enough bonus/accrual explanation, or Core OP falls below KRW 100T.
Capital allocation failure	Compensation buybacks are mistaken for shareholder return, while recurring profit-sharing erodes FY27 EPS and FCF.

Hard invalidation conditions:

Condition	Meaning
Reported OP below KRW 84T and not explained by at least KRW 25T of pre-accrual	More than timing noise
Core OP below KRW 100T	Core memory profit power weaker than expected
3Q26 OP outlook below KRW 100T	Peak-out risk
3Q DRAM/NAND prices fall QoQ	Pricing thesis damaged
No HBM4/eSSD share gains	2027 EPS and multiple expansion limited
Foundry/S.LSI loss persists or widens	Samsung discount persists

Final view

At current prices, Micron’s surprise is almost gone from Samsung and SK Hynix. Samsung has returned to a price that barely embeds the Micron read-through. SK Hynix has almost returned to pre-event levels after a strong June 25 reaction.

Samsung’s opportunity is now specific: if 2Q preliminary results show that the headline OP decline is mostly bonus-accrual timing, while Core OP is above KRW 100T and 3Q durability remains intact, the stock can reprice.

The relative conclusion is straightforward:

Stock	Interpretation
Samsung Electronics	Unreflected alpha if Core OP and 3Q durability are confirmed
SK Hynix	Pullback and reacceleration alpha, not a “cheap” stock
Micron	Cleanest proof of the AI memory cycle, but already repriced

One sentence: Micron’s earnings were reflected in Korean memory names for one day, but most of that effect has been erased. For Samsung, the next battle is not headline 2Q OP but Core OP above KRW 100 trillion and 3Q durability.

Core OP on Korea Invest Insights